In order to take proper control of your life it is very important that you keep a good control on your finances. This means that you must take good control even on your debts and make efforts towards paying them off.

Some tips that you may follow in order to take control of your debts are as follows.

1. Lowering the debt to income ratio: It is very important for you to lower your debt to income ratio. This is because the debt to income ratio is a reflection of your financial state. Most lenders will check your debt to income ratio along with your credit report. In case you have a very high debt to income ratio you may be denied loans. This will have a very bad effect on your financial life. Thus, you are to try and lower your debt to income ratio if the ratio is more than 30%. This will help you take control of your financial life.

2. Setting up a debt repayment plan: If you want to get out of a financial crisis and maintain a healthy financial life, then you will have to pay off your debts. In order to do so you must set up a debt repayment plan. The purpose of formulating such a plan is that it helps you to concentrate all the extra amount of money that you have and use it to pay off your debts. Another advantage of setting up a plan is that the process of debt repayment will be faster than it would have been otherwise.

3. Paying off all your old debts: One of the ways in which you will be able to come back on track is by trying to pay off your old debts. In order to do so you may approach a single company at a single time and gradually pay off your debts. As you keep on paying off your old debts you will be improving your credit score as well. This helps your financial situation greatly.

4. Stopping the usage of credit cards: It is very easy to get into credit card debts because you will not be able to realize that you are sinking into debts until it’s too late. Thus, when you face a financial difficulty and want to take control of your finances, then you will have to stop using your credit cards.

These are a few things that you can do in order to pay off your debts and take control of your financial situation.

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Well, for those of us who like to do as much shopping on-line, in the comfort of our own homes, in comfortable (and warm) clothes, at whatever time of day is convenient (last year my pregnant wife did most of our shopping in the middle of one night when she couldn’t get to sleep!), I’d like to point out an upcoming event that might hold a great deal of interest for you- Free Shipping Day 2010!

Free Shipping Day this year occurs later this week – Friday December 17th – and it is pretty much what it sounds like it is. According to the website, FreeShippingDay.com, “On Friday, December 17, more than 1,000 participating merchants will offer free shipping with delivery by Christmas Eve in the continental United States.” In fact, the website currently states that more than 1300 merchants are participating in Free Shipping Day.

These include big name merchants such as Sears, Ann Taylor Loft, Office Max, Toys R Us, and so on. For those with kids (like me) you might be interested to know that Melissa and Doug is participating. For those who play around musically (like me) you might also be interested to know that Guitar Center is participating. Ok, I’m not going to list all of them!

So, if you are still scrounging around for those little minute gifts and don’t have the time to actually leave your house and scrounge around for them, you might want to check out the participating merchants.  Hopefully you can get that perfect something (or that list of perfect somethings) and still get it shipped in time for Christmas without paying more for shipping costs than you do for the actual gifts!

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Friday is the first day of October but it is also the first day of the “10 Day Give.”  If you are not familiar with it, the 10 Day Give is a challenge conceived by Bob over at ChristianPF.com.  Its purpose is summed up succinctly as a way to “get our minds off of ourselves and start thinking about how we can help others.”

If you read the title of the post, you know that this is the third annual 10 Day Give…so if you haven’t done it before, this is the year!  And if you have participated previously, keep the momentum going!  I was a bystander the first year but did participate last year…only I didn’t do a great job of actually helping others.  I didn’t “actively participate” all 10 days so this year I’m trying to do a better job.

So, I guess I will say that this post serves as my challenge to you (and even more so to me) to participate in this year’s event.  So what does that all mean? Well, head on over to the 10 day give site to get more info and sign up but it’s pretty much what you already think it is.  For 10 days starting October 1st, try to give something to someone each day (that’s it?  yep, that’s it…pretty simple).  It could be money but it doesn’t have to be.  It could be a gift but it doesn’t have to be.  Sure, you could buy someone a coffee or lunch but you could also give someone a gift for no reason or do something for someone or spend your time with someone.  Get creative…get inspired…get motivated…and get going (No, actually, wait until Friday…just kidding).

First stop: head over to ChristianPF and find out more information about the 10 Day Give and add your name to the list of participants.

PS: Most of this post was actually written to inspire and motivate myself…but if inspires and motivates anyone else then all the better!

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It always surprises people to learn that about 30 percent of the tenants of self storage facilities are small businesses. I am not sure why — businesses need, if anything, more storage than the average family. I find that many of our small business tenants have turned to self storage either because they need to minimize the overhead costs for their business, and must keep the official retail or office space small or home-based, or because they need a simple way to merge storage and shipping. Small businesses that need to arrange their own regular shipping or local deliveries often prefer to rent space at a facility that offers moving trucks for rent as well. That way, the business does not have to invest in a delivery truck (which then has to be stored as well, in addition to needing maintenance, insurance, and licensing).

The obvious example of an entrepreneur using storage space is an online retail business, such as an eBay store. However, I find that many entrepreneurs are using self-storage units in ways that are not so obvious:

Watercraft Detailing & Winterization: At one of our North Carolina facilities that offers winter boat storage, I met a man who told me that he figured out that he had a budget for space for a boat cleaning and repair business, but only for a few months out of the year. He was delighted to learn that self storage units do not have to be rented year round — they can be rented on a month to month basis, or only when you need them. He now uses a self storage space at a facility near a marina to offer boat cleaning and maintenance to boat owners who are about to put their boats in storage for the winter. He offers the service for two months in the fall. Then he packs up his tools and takes them home — he needs the space primarily for the boats he works on, as the tools themselves are fairly compact. In the spring, he rents another unit and offers the same service to boat owners who are taking their boats out of storage.

Wine Delivery: I chatted with a northern California business owner who is the middleman between wineries and local businesses and wine collectors. She needed trucks, but only occasionally, to transport wine. It streamlined her business considerably to be able to transport wine via truck to a climate-controlled facility, and to unload the wine and return the truck simultaneously. Then she rented the truck again later, when she went out to make deliveries. She was glad to be able to cut costs on shipping, since she also had to comply with state regulations related to shipping alcohol.

Hand Crafted Signs: An Oregon woodworker who rented a self-storage unit last year told me that he was glad to find a facility that also had trucks for rent. He produces custom handmade wooden signs for local businesses, and then delivers them. If he can, he deliver the signs using his own car, but occasionally he has a sign that is quite large and must be moved using a truck. In addition to using the trucks to deliver his signs, he told me that it is very nice to be able to rent one occasionally when he needs to bring in new materials, or when he participates in art fairs over the summer. For art fairs, he not only loads quite a few of his latest signs, but he also brings shelves and tables to display them on, and a large tent (in case of rain). The rest of the time, though, he tells me that he doesn’t need a truck — nor does he need to be budgeting part of his business income every month to pay for parking, maintenance or insurance.

Computer Solutions: Some of our tenants, on the other hand, have their own trucks, but they need a secure place to park them because they keep their trucks full of expensive equipment. One of our Chicago units is rented by a business that does IT consulting for larger corporations. They travel to sites where businesses are having trouble with their computer networks (in this recession, many companies have laid off their information technology (IT) departments). When they travel to a business site, they bring a van full of computers that can run diagnostic tests on a system. They also bring commonly used replacement parts, network cables, and the like. But they don’t want to park that van, full of electronics, out on the street. Moreover, it’s easier for the “Geeks” — there are two of them — to drive to our self storage facility and park in our parking lot, which is usually not full because most tenants don’t stay all day. Then they take the van out and drive to the site where they will be working for the day. As a result, they not only get affordable security for their business equipment, but they also save on parking for their private vehicles. I thought it was an ingenious way to solve the perennial Chicago parking problem.

Sometimes business owners have to think creatively to stay out of debt. I used to think that anyone starting a new business would have to go into debt just to have the start up capital to provide a place of business, equipment, and/or inventory (depending on the business). But I’ve come to realize that it is possible to start a business with very little capital. No one wants to think that their business is going to be the one to fail, but if your business does fail, you will be far better off walking away from it free and clear — rather than with a mountain of debt. I’ve grown to admire entrepreneurs who refuse to let the excitement of a new business sway their judgment when it comes to personal finance. In my experience, those entrepreneurs who stick to their principles become more than just successful businessmen and women — they become leaders in their community. And we need leaders like that — leaders who have a strong sense of personal responsibility, and who will take the motto “borrow from none,” and apply it whenever possible to our state and local governments.

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If you are a partner or a shareholder in a family or small business, you would want your business to flourish even after you are gone. Yet, statistics reveal that only 30% of family businesses survive after shareholders pass on. This makes it all the more pertinent for you to have a business succession plan in place, so that your business is protected from financial mismanagement, a buy-out or even bankruptcy after you die. A key tool in your business succession plan is a buy-sell agreement.

What are buy-sell agreements?

A buy-sell agreement is an agreement between business partners to buy out the share of a deceased partner. A buy-sell agreement is uncomplicated and economical; it removes all the problems associated with buying another partner’s interest in the business – the question of whether the business can fund a buyout, and if it can replace the job of the deceased partner. Life insurance is an important tool in the execution of business succession plans. How does it work? It is very simple – after determining the value of the business, life insurance is purchased based on each partner’s share. This allows a no-hassle transfer of interest in the event of a partner’s death.

Types of life insurance-funded buy-sell agreements

There are two types of buy-sell agreements, Cross Purchase and Stock Redemption. In a Cross Purchase each owner buys a life insurance policy on the other owners, and is named the beneficiary of such a policy. In a Stock Redemption situation the business purchases the life insurance policies. When a partner or shareholder dies, the other partners use the proceeds of the policy to redeem the deceased partner’s share.

The process

Though buy-sell agreements can be drafted and executed by the partners themselves, it helps to take the help of an attorney, an accountant and a life insurance professional to guide you through the process and spot any loopholes in your succession plan. Make sure you work with professionals with either a CLU (Chartered Life Underwriter) or a CFC (Chartered Financial Consultant) designation. An attorney’s role is vital in drafting the agreement, the value of the firm, and in deciding the best alternative from the perspective of tax benefits.

These professionals will also help you choose the best kinds of life insurance policies for the execution of your buy-sell agreement. Free life insurance quotes are also available online.

Buy-sell agreement/policy review

Experts in buy-sell strategies recommend that the agreement should be reviewed periodically, preferably every alternate year. The value of your business will keep changing, and you need to make the corrections in your policy values accordingly.

In the event that the owners decide to wind up the business or sell it, it doesn’t take too much work to convert the life insurance policy into a personal life insurance policy.

Advantages and disadvantages of a buy-sell agreement

A buy-sell life insurance agreement lays to rest many of the succession-related uncertainties that business partners are faced with. The life insurance death benefit aids the partners/ the business to buyout the deceased partner’s share. The deceased partner’s family benefits from the proceeds of the sale, and the amount is tax-deferred. The proceeds are also exempt from corporate alternative minimum tax and creditor claims.

A qualified adviser will be able to help businesses iron out the few creases that buy-sell agreements have – life insurance premiums are not tax deductible, the premiums will vary as per the partners’ individual age and health conditions, etc.

Buy-sell agreements are vital to succession plans of small businesses

Even if the partners are in total agreement about future plans, a formal buy-sell agreement will set things in stone, and help ease the minds of all the parties concerned. A buy-sell agreement is vital to the smooth continuity of every small business, so get started on getting quotes online for your buy-sell plan today.

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Being aware of the various tax penalties the IRS could impose will help you avoid them. Here are four tax penalties every taxpayer should be aware of and avoid:

Failure to File Penalty

The Failure to File Penalty is imposed on taxpayers who do not file their tax return or request a tax filing deadline by the due date of April 15th. If you are unable to complete your return before the deadline, make sure you request an extension which will give you until October 15th to file. If an extension is granted, and you still do not file your taxes by the new deadline, you will be charged a Failure to File Penalty which is 5% of the total amount of tax liability per month for a maximum of 25% of your total tax liability.

If it is found that you didn’t file your taxes for fraudulent or negligent reasons, your fine can be increased as much as 75% of your original, total tax liability.

Avoid having to pay this penalty simply by submitting your tax return on time.

Failure to Pay Penalty

The Failure to Pay Penalty is calculated from the original payment deadline of April 15th, and is .5% per month for each month you don’t pay your owed taxes in their entirety. This penalty can exceed 25% of the unpaid balance on your taxes.

This penalty is in addition to the interest rate charged to taxes owed. The average IRS interest rate for underpayment of tax liabilities is around 4% currently, but the rate changes every three months.

Avoid the Failure to Pay Penalty by paying your taxes by the due date. If you cannot pay your total tax liabilities in full, then it is best to pay what you can in order to reduce the failure to pay penalty.

Accuracy Penalty

If the IRS finds that your tax return is inaccurate, there will be accuracy penalties and interest imposed. If the mistakes do not appear to be intentional, the accuracy penalty is normally 20% of the total understatement of tax. If the mistakes appear to be fraudulent or there were gross valuation misstatements, the penalty may be as much as 40%.

If you believe the penalty you receive for inaccurate information on your tax return is due to inaccurate advice you received from an IRS employee, you may be able to file a penalty abatement and have the penalty removed.

There are some other situations which may result in the removal of the penalty as well, and a tax professional can assist you with determining if your reason for the inaccurate information would be considered with reasonable cause or a valid excuse.

You can avoid the Accuracy Penalty by checking your tax return carefully to ensure everything on it is correct. Use the assistance of tax professionals if you need help filing your tax return.

Tax Fraud Penalty

If you have underpaid taxes owed due to fraud, you will receive a tax fraud penalty of 75% of the underpayment. The IRS will examine each return with a tax underpayment to determine whether or not there is evidence of fraud. Negligence, or not understanding tax laws is not considered fraud. You can avoid a tax fraud penalty by completing your tax return with accurate information, and following IRS rules.

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Thought you might be interested in weighing in on the decision we are needing to make. We are nearly entirely on a fixed income now, so there is no cash from the working budget for any large purchase. Our clothes washer is at least 13 years old and has been making strange noises for some time. The repair man said not to put any more money into it if breaks down again. So here is the decision: do we gamble and wait for the thing to die and then possibly have to pay a larger amount (from savings) for a new one OR do we take the money (again from savings) and purchase a new one now, hopefully on sale and while we can get a little Energy Star appliance “clunker” rebate from the government? Which move is more financially prudent?

I think the key here is to not have to put the purchase on a credit card and pay a high interest rate on it thus making a difficult purchase even more so.  In either case you describe, you are using your own money to purchase the washer.  If you were saving up to be able to buy one later but had to use a credit card to buy one now, I would say wait and save.  That is not the case for you.

Let’s look at the details a bit more.  We’ve already established that you are using money from your savings.  The question is should you wait or do it now.  The advantages of buying now are that you can be proactive about finding a sale and use the appliance clunker rebate (of course, each state handles this differently).  Another advantage of waiting would be to earn interest on the money in your savings account while it sits there.  That is not going to amount to a significant amount of money even if you do get another year or two out of your washer.  At $1000 with current rates maybe at 1%, that’s $10 a year – not very much.  As long as we’re talking small sums of money, don’t forget to consider how much more energy efficient a new washer would be compared to one that is 13 years old.  A new one will most likely save you some energy costs and the sooner you purchase one the sooner you’ll start realizing those savings.

On the flip-side, the pros for waiting are that your washer could in fact continue to work for a long time thus saving you that cash outlay for months or possibly years.  I guess that’s all I can come up with as a pro for waiting (I’d have a better argument for waiting if you told me you were going to charge it and pay it off over the next 24 months!)

Again, I think the overarching key to this question is whether you can make the purchase now with your own money or if you have to use a credit card.  If I were in your position with money in the bank to purchase a new washer, I would start looking for one.  Do your research for price, effectiveness, and reliability, check out different stores, search for coupons and sales, etc.  Basically, I’m suggesting that you prepare yourself ahead of time so you can take your time but still be ready to pounce when you find a great deal.  Good luck!

I’d love to hear if any readers would like to chime in with some (possibly different) advice…

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If there is a poor man among your brothers in any of the towns of the land that the LORD your God is giving you, do not be hardhearted or tightfisted toward your poor brother. Rather be openhanded and freely lend him whatever he needs.  Give generously to him and do so without a grudging heart; then because of this the LORD your God will bless you in all your work and in everything you put your hand to.  Deuteronomy 15:7,8,10 (NIV)

If you’re reading this, then you’re most likely someone who cares at least a little bit about receiving God’s blessing (and maybe you care a whole lot).  This week’s verse is therefore of interest to you.  In the last sentence we see that God will bless you in “all your work and in everything you put your hand to.”  To be blessed in everything you do is a pretty sweet blessing (I want some of that!).

Of course, the next question is, “How do I go about receiving this awesome blessing from God?”  The first sentences tell us that we should freely lend a less fortunate person whatever he needs and should not be miserly toward him.  That is how you receive this blessing from God.  That seems counterintuitive, wouldn’t you agree?  It is basically teaching that you have to give away to get more.  That certainly flies in the face of the worldly wisdom of our society.

You’ve probably heard a Christian pastor or teacher or blogger at some point say that it is critically important for you to give to God as part of your financial plan.  In fact, you’ve probably heard that it should be the first thing you do with your money each month (I’ve said both of those things on this site).  Even if you are having trouble making everything else fit into your budget, skipping this crucial piece of your plan will have deleterious effects on your finances.  Again, that’s another counterintuitive teaching, isn’t it?

I think this week’s verse explains why that lesson actually makes sense (ok, still not from a worldly perspective, but I only really care about the Godly perspective anyway).  We just learned that if we give generously and without a grudging heart that God will bless everything that we do!  Now I’m not suggesting that we give money and God is forced to make us rich – I don’t think that is the message of this verse at all.  Remember the “generous” and “without a grudging heart” thing?  I’m convinced that giving money solely for the purpose of getting more back from God does not meet those criteria.

What I am saying is that we can give our gifts to God’s kingdom and be generous to those in need knowing that God will return that to us in the form of blessing.  Whether that’s a financial blessing or a family blessing or some other kind (or all of the above), I can’t say with certainty.  But I do believe that God tends to give more resources to those who have proven that they will direct a good portion of those resources back to God’s kingdom and to bless those in need.  So that’s something for you to think about this week.

God bless and have a great week…

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Therefore, take care to follow the commands, decrees and laws I give you today.   If you pay attention to these laws and are careful to follow them, then the LORD your God will keep his covenant of love with you, as he swore to your forefathers.  He will love you and bless you and increase your numbers. He will bless the fruit of your womb, the crops of your land—your grain, new wine and oil—the calves of your herds and the lambs of your flocks in the land that he swore to your forefathers to give you.  Deuteronomy 7:11-13 (NIV)

This week’s Bible verse is a simple reminder of who is in control of everything (hint: it’s God).  Yes, it is a simple truth but one that I think we need to remind ourselves of occasionally.  Of course, most God-honoring people know that God “blesses” but I think sometimes we lose sight of the specifics of what or how He blesses us.  That’s why this is our weekly verse…

Not only does God bless us in a generic sense but he also blesses materially as well.  He will bless “the crops of your land, … the calves of your herds and the lambs of your flocks.”   This is another reminder to not separate out your “church” life from your “work” life.  We should not be people that do church and then do work and then ….   Instead, we should be Christians who recognize that God wants to be foremost in ALL of our lives: yes Sunday morning but also every morning.  He wants to be the most important thing in all aspects of our lives and has the capability to direct us and bless us in all aspects of our lives as well.  Seeing as this is a personal finance blog, I thought it appropriate to remind us who is really in control of our finances and wealth.

So don’t be a person who goes to church sometimes; rather, be a Christian who seeks to follow God’s commands in all areas of his/her life and therefore experiences all the blessings that God wants to put into your life.

God bless and have a great week…

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I am not saying this because I am in need, for I have learned to be content whatever the circumstances. I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want. I can do everything through him who gives me strength.  Phil 4:11-13 (NIV)

Being content must be easier said than done considering how few people can actually live that way, at least in my society (myself included).  I truly believe that our inability to be “content” generates a tremendous number of problems in our world today.

Have you ever thought or uttered the following (surely you at least know someone who has):  “Sure, my house is fine but my neighbor has a bigger/nicer/newer (fill in the blank) house, patio, pool, car, etc.  What makes my neighbor so special…if he can have one of those, then I deserve one too!  Unfortunately, now that I’ve determined that I need one of those, I don’t have the money to spend to match my neighbor…but I do have a credit card!”  Follow that pattern a couple times and you’ll pretty quickly find yourself in an uncomfortable and ultimately untenable situation.

The alternative to falling into this destructive pattern is, of course, being content with what you have.  Being financially prudent in your purchases can pretty much be summed up in these two simple rules:

1. Make wise purchase decisions based on reality
2. Be content with those purchases

I think we all agree that being smart and then being content will drive us a long way down the path to winning with our finances.  I think we also all agree that a lot of people are not doing that.  Well, most of the rest of this blog is about the first step, so let’s focus on the second step here briefly.

In this week’s verse, Paul tells us that he was able to be content in all manner of circumstances.  Whether he was experiencing a time of want or a time of plenty, he was satisfied (and isn’t it really hard to be satisfied during a time of want that comes after a time of prosperity?).  How did he accomplish this – through the “secret” that he uncovered: “I can do everything through him who gives me strength.”  “Him,” of course, is Jesus Christ.

Paul’s deep faith in Jesus provided him with real strength to confront those feelings of desire, lust, and envy that strike at us all.  I don’t think Paul is saying that he never experienced those emotions, just that he was imbued with the strength to put them aside and overcome them.  Exercising our faith forces us to shift our focus.  We no longer dwell on us, what we want and need.  Rather, we dwell on God and the eternal.  The “things” that tend to preoccupy us are reclassified as eternally insignificant and therefore no longer hold so much sway over us.

Faith in Jesus Christ provides us with the one thing that we really do need – our eternal salvation.  Shift your focus thusly and you may just see that having the most important thing will reduce your desire for the relatively insignificant ones.

God bless and have a great week..

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With the economy still in a decided downturn and foreclosures reaching all-time highs, now might seem like the worst time in recent history to think about remodeling your home. It certainly won’t be easy to get a loan or a line of equity on your house with the real estate market slow to rebound and banks pulling the purse-strings tighter and tighter. However, if you can find a way to scrape together a little cash, or if you’ve been saving, now is a great time for the frugal shopper to do some home upgrades.

For starters, a little can go a long way in this economy. Retail spending is, simply put, not what it was. Vendors that were thriving a few years ago are now being forced to slash prices and even close their doors. The point is, they want your business! And you can use it to your advantage. Shop around to find the products you want and you will be amazed at the discounts you discover (shopping online may be even more fruitful). Then go to several stores and find out if they are willing to price match or give you a better deal to stop you from going to the competition. You can often get an outrageous bargain just by asking for it. Also, if you’re on a tight budget, consider a merchant that sells reclaimed items (like flooring, cabinets, hardware, etc.). Although it may not be the newest product on the market, and it might have a little wear and tear, you can often find merchandise that has a higher value (in terms of construction, quality, materials, etc.) than you could get for the same price if you bought something new.

And that’s just the parts. You can also save on labor. Of course, there is always the do it yourself method, which is great for handy people. For the rest of us, a contractor is necessary to get the job done. And while contract work has a bad reputation for getting very pricey, very quick, we are currently in a buyer’s market. Building of new structures has slowed significantly and as a result, the market is flooded with contractors looking for work. If you seek several bids (make sure to get recommendations) you stand to save a lot of money on labor. That said, don’t be afraid to do some of the work yourself. Almost anyone can learn to install a backsplash, replace a lighting fixture, or swap out a faucet, so get yourself a home improvement guide to save even more.

Why wait to build your dream home? Even if you plan to upgrade as a way to get more value out of your house, you don’t have to wait until you’re ready to sell. Remodel now, while you can get the best price, and you stand to appreciate an even better return on your investment in a few years when the housing market rebounds. Plus, you’ll get to enjoy a custom-made interior in the mean time.

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Another volatile month sees us end up …. exactly where we started?

Our assets decreased 0.07%

As I look over our asset accounts, it appears that every balance has dropped slightly except for my stock options.  My stock options value increased almost 14% and that just about completely balanced out all the other drops.  Actually, that’s not exactly true – somehow our retirement accounts managed to increase slightly this month as well.

Our cash accounts have been dropping pretty quickly the last few months as we continue to pay off the large expenses related to our baby’s birth and adjust to living on one salary.  Overall, it did decrease again this month but by a much smaller amount that the previous few months.  I’m hoping that’s a good sign that we’re starting to get our spending in line with out income.

Our liabilities decreased 0.12%

Our mortgage dropped the standard 0.12% again this month.  I mentioned previously that our mortgage payment is by far our largest payment each month (well, it still is).  I think we’ll need to do something about this to get our expenses to meet up with our income, but I’m not exactly sure what to do about it at this point as our home value is much less than our mortgage balance.

Our net worth held steady

Well, this is the first month that has happened – our overall net worth basically did not budge from last month’s value.  I guess that’s a good thing.  Of course, I’d like to see it increasing but after a significant drop last month, I’m just happy it did not head even further south this month.

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And if you are untrustworthy about worldly wealth, who will trust you with the true riches of heaven?  Luke 13:11 (NLT)

I spend too much time thinking about, writing about, and discussing my finances.  You might have the same problem (it’s likely since you are reading a personal finance blog at this very moment!).  My wife often correctly tells me what I should worry less about our finances and trust God more in that area of our life.  Of course, she is correct but I do think that a healthy balance is needed in this area.  In fact, I think this week’s verse underscores the need to be proactive about being a good steward and taking care of your finances.

As it states, if we are “untrustworthy” with our worldly wealth, then we will never be trusted with heavenly riches.  It is therefore not appropriate to simply put our heads in the sand, ignore our finances, spend whatever we want, and then rely on God to make it all balance out at the end of the month (Reminds me of a Tim Hawkins routine: “Father, change the molecular structure of this food, this complete trash we’re about to shove in our gullet.  Change the cheeto into a carrot stick on the way down!”).  Remember that this is Jesus talking in this verse – Jesus Himself is reminding us that we need to be active in managing our finances to prove that we are capable of being entrusted with the “true riches of heaven.”

I would simply caution you not to go overboard and get so focused on money and your finances that they replace God as most important in your life.  Yes, be a good steward and manage your money faithfully, but your main purpose in life should still be to glorify God, not to spend every waking moment reading blogs, fretting about the stock market, and clicking on tweets that contain “get-rich-quick” schemes (oooh, maybe this one is legit)!  Again, accumulating wealth on earth should not be our end goal here;  our main goal is to be faithful to God with our finances to prove we are worthy of being entrusted with the true riches.

God bless and have a great week…

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“Charity” can be a loaded word that means something different to everyone. Charity can be pejorative, such as: “Those charity cases get money, sit on their backsides, and don’t work”. It can be a scornful word, meaning a break is being given because one is better than the other, for example: “Tom took the girl out on a charity date.”

It’s interesting how the word was first used, hundreds of years ago; “charity” meant “love”. It could almost be said that “charity” had a double meaning from the start. You give charity because you have charity. Charity, in its modern sense, means that we feel a kind of love when we give, even for those we may never meet.

People who need charity now, in large part, are people who never needed charity before. The ruined economy, predatory lenders, and the bank bailouts that helped no one except the banks have made a new class of poor in our country. Anyone who escaped relatively unscathed from the recent economic meltdown can thank their lucky stars by opening their wallets a little wider when it comes time to give to charity. Below are seven more very good reasons to give.

Tax Deductions

Lots of folks give to the charities of their choice for this reason. Others find it a nice reward for the charity they give. Whatever reason, give, keep the receipts, and claim it on next year’s taxes.

It Will Save You Money Long Term

This may sound in essence a bit cold, but here goes. Children who receive a good education, have someone who cares about them, and eat nutritious meals are more apt to finish school and stay out of trouble. Donate to boys and girls clubs, local schools, food banks and free lunch programs, or some other charity that helps out kids. You won’t have to pay in the future for new prisons, for one thing, and if spending for prisons isn’t throwing your money down a rat hole, what is?

You may need charity yourself one day.

Donate for research to learn the cure for cancer, HIV, MS, MD, diabetes; whichever charity speaks to you. Hopefully the cure will be found before you or someone you love is diagnosed with these illnesses.

Create a Lasting Legacy

Donate to building funds for hospitals, libraries, schools, your local church. Perhaps you aren’t rich enough to have a wing named after you, but your kids can tell your grandkids that you help build something important.

For Your Grandchildren

While we’re on the subject of grandkids, you do want them to experience clean water, fresh air, icebergs and wild animals, don’t you? Donate to environmental groups, wildlife groups, conservation groups; they’ll be glad you did.

Healthy for the Soul

It’s good to give, why else do we celebrate gift giving holidays? You don’t have to go around trumpeting how much money you give to a particular charity; you can celebrate that warm glow quietly and teach your kids to do the same. It’s only money, right? Put your money where your mouth is.

If not you, who will?

Sad but true. There are a significant number of folks who think being a cold hearted old skinflint is a sign of good character. Give to prove them wrong.

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Now the people became like those who complain of adversity in the hearing of the LORD; and when the LORD heard it, His anger was kindled, and the fire of the LORD burned among them and consumed some of the outskirts of the camp.  Numbers 11:1 (NASB)

Have you ever been around someone who constantly dwells on what is wrong around them?  No matter what happens, they’re not happy.  Have you ever heard the saying “every cloud has a silver lining?”  Well, these people’s favorite saying seems to be “every silver lining has a dark cloud.”  This is what was happening to the Israelites in this week’s passage.

God had miraculously brought them out of Egypt.  He had freed them from slavery and was leading them to the excellent land that He had promised to them.  He also provided them with food for each day even though they were wandering through wilderness and what-not.

Unfortunately, it just wasn’t good enough for them.  Instead of dwelling on their amazing circumstances of manna failing daily from heaven and God in a pillar of cloud guiding them, they missed Egypt!  They missed the fish they used to “eat free” and the cucumbers, melons, leeks, onions, and garlic.  Would they really rather trade onions and leeks for freedom? (personally I wouldn’t trade a a broken CD for onions but that’s a topic for a different day)

Our situation may not be as extreme (you’re probably not reading this from the wilderness somewhere) but we often tend to fall into discontent and complaining as well.  No matter your current situation, you are most likely better off then the vast majority in this world.  Focus on what you do have not what you don’t and if you do find yourself longing for your Eqypt, be realistic in your memory.  Sure it was nice to have fish each day, but the Israelites obviously forgot about the price they paid to get those meals.  Again, get your focus off of yourself and onto God and others and you may find that your discontent drops considerably.

God bless and have a great week…

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A Journey To Financial Dependence

Wait a minute, you say, don’t you mean financial independence?  So much of what is done in the personal finance world is geared toward taking a person to that big goal of “financial independence.”  But no, you read that correctly, this is a book about financial dependence.  It makes perfect sense, actually, if you stop to think about it.  In a world of such uncertainty amidst wild stock market swings, failing banks, and unscrupulous CEOs, why strive to rely on yourself when you can achieve dependence on the one truly solid foundation – God Himself?

This small book has a interesting layout.  It is mostly a devotional book.  Various authors have contributed short writings (1-2 pages) that are to be read as independent devotions.  Interwoven among the entries, though, is a fictionalized and modernized retelling of the “Rich Young Ruler” story from the Luke 18 of the Bible.  The devotions are actually presented as journal entries that the main character in  the story is reading.  Thus you read a few short chapters of the story and then there are a number of journal entries before the next few chapters.

I like the format actually; it works for me.  I haven’t finished reading the book but I do find myself interested in its conclusion.  The main meat of the book, the devotions, are written first person by each author and include some real world stories that I find inspirational.  The main focus, of course, is dependence on God so there are a number of anecdotes about how God provided for needs in just the right amount at just the right time – I love reading those accounts!

Building Blocks of Faith

Each devotional includes a short prayer and a blurb titled Building Blocks of Faith.  I’ve found a few of those to be quite compelling as well.  The most interesting to me is “Our lack of money is just as much an answer from God as His abundance.”  Another thought-provoking one is “It’s not a matter of how much you posses, but how much your possessions matter to you.”  I found those to be two good thoughts to ponder.

To summarize, here is some information from the book’s website that I found very interesting:

The story of the rich young ruler was the perfect example of how God asks us to allow Him control over all we have. Faith and FINANCES: In God We Trust – A Journey of Financial Dependence isn’t your typical wealth-management book. It’s NOT how to build your 401K. Rather it was meant to be an example of trust—of knowing how to trust God with for and with your daily provision. God seemed to saying, “If you won’t trust me with your finances how will you ever trust me with your life?”

This was the seed for Faith and FINANCES: In God We Trust. The book is designed to allow churches to minister to congregations and encourage them to make God their financial advisor.
God instructed us, not to worry and yet when times are tight, we recoil, retreat and hide our wealth from God and each other. Financial dependence on God releases us from the burden of worry.

Little faith is hoping that God will do what He says.
Big faith is believing that God will do what He says.

But great faith, is knowing God has already done what He said He’d do.

We invite you to learn more about Faith and Finances during April and May while they tour cyberspace. To find other tour stops, visit http://bookpromotionservices.com/2010/03/02/faith-finances/ . For other details about the book or to get more information about Christian Devotions visit http://www.faithandfinances.us/. The book is for sale at: http://www.amazon.com/gp/product/0982206542

That’s good stuff right there – the difference between little, big, and great faith.  Remember, it takes so much to achieve “financial independence” which is such a wary foothold anyway.  So many different things in our world can wipe out even great wealth in the blink of an eye.  Instead, focus on the solid foundation that is God – besides He owns everything anyway.  This is a lesson I certainly struggle with and I have been trying to move my focus from accumulating all that I can to create my own security to relying on God for His peace and security.

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Thud! That’s the sound of our net worth crashing back down to earth after two strong and unexpected months of increase.

Our assets decreased 3.3%

For those who were not paying attention at the time, there was quite an interesting day in the stock market a few weeks ago. Unfortunately for me, that happened to fall on the day that I took our net worth snap-shot for the month! Our cash dropped significantly (almost 6%) again this month but our other accounts did not increase to offset that drop. As a result, things got ugly net-worth-wise this month. We are finally (for the most part) finished with the transition of adjusting withholding and savings to go to a single salary. Unfortunately, we are still finishing the bills from our daughter’s birth and I think it all finally caught up to us this month. We simply must decrease our expenditures to stop these significant monthly drops in our cash account balances. It’s gotten to the point that we are going to go to actual cash for more expenses next month.

Our liabilities decreased 0.12%

Our mortgage dropped the standard 0.12% again this month. I mentioned last month that our mortgage payment is by far our largest payment each month. We are in the process of evaluating whether something drastic has to be done about it over the next couple months. If you asked me right now, I’d have to say that, “yes,” we need to change the mortgage somehow. We are spending too much money on the mortgage and as a result are not able to do other things that we’d like to do. The final decision won’t be made until July though, so I won’t get ahead of myself.

Our net worth dropped more than 6%

Last month I mentioned that our net worth had reached its highest level ever….well, that’s no longer true! After this month’s significant drop, we’re well below that. It’s acted like a yo-yo this entire year. I’m not concerned about our stock market accounts, though, as I expect them to bounce around. I am concerned that our cash balances continue to drop and drop at a much higher rate that I anticipated. I’m trying to increase our income but we really should do something about our expenses as well…hence the decision to actually try the cash thing next month – I guess we’ll see if all the hype for using cash is justified!

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And he said, “This is what the LORD says: Make this valley full of ditches.  For this is what the LORD says: You will see neither wind nor rain, yet this valley will be filled with water, and you, your cattle and your other animals will drink. 2 Kings 3:16-17 (NIV)

The armies of Judah and Israel were out in the middle of the desert with no water and they were getting scared.  They were on their way to Moab but now they were concerned that they were not even going to make it to the battle.  They inquired of Elisha the prophet and this was the word passed to them from God through Elisha. Obediently, they dug the trenches and one morning they looked and mysteriously saw water coming from Edom and filling up their trenches such that they and their animals had plenty of water to drink.

And just what does this verse have to do with personal finances, you ask?  It’s a verse about “blessing” so bear with me here!  The armies needed to be blessed by God and they were, miraculously.  I’d venture that each of us would welcome a blessing from God (I know I would) whether it be in the area of finances or whatever.  So, let’s examine this passage in more detail.

First we see that the armies were concerned.  They had a big problem and didn’t know how to solve it.  Plus this problem was spilling over into other areas of their lives as they were worried they would be unsuccessful in their battle with their enemy.  Are they any big problems in your life that you don’t know how to solve? Let’s look at the steps they followed in this story:

1. Go to God: Note what they did with their problem – they went down to a prophet of God, Elisha, to find out what God was going to do in this situation.  I think that was definitely the correct decision.  If you’re facing a giant of a problem, remember that God is the biggest giant of them all.

2. Prepare for the blessing: Now the prophet told them to do something strange; he told them to dig a bunch of ditches in the middle of the desert.  This might seem like a pointless exercise to you and it might have seen pointless to them, too….but they did it.  They were obedient to God and dug the ditches.  They had to believe that God was going to give them the blessing and they had to put in some hard work to prepare for it.

The armies dug the ditches and the water came.  There is a bit more to the story though.  When the Moabites woke up they saw reflections off of the water from the early morning sun.  It reflected red so they thought they armies of Judah and Israel and Edom had attacked and killed each other.  The Moabites then rushed out to take the spoil only to be surprised and quickly defeated by the armies.

If you think about it, their biggest concern of having no water and thus losing the battle to Moab actually led to their victory!  They went to God and were obedient to Him.  As a result, their immediate need for water was taken care of and their ultimate need for victory was facilitated through the blessing.  Amazing!

So what exactly does this mean for each of us?  How exactly should we prepare for the blessing from God?  Well, that’s a hard question to answer.  I would guess it would be a very individualized answer for each one of us.  What I do know is that we need to take our concerns to God with the assurance that he cares for us and will bless us.

God bless (prepare for it!) and have a great week…

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In the wake of one of the largest earthquakes the world has ever seen, donations continue to come in by the thousands to help Haiti rebuild. While the outpouring of support has been tremendous, a tragedy like this is also an excellent opportunity for someone to take advantage. Charities continue to do excellent work in helping those that cannot afford to help themselves but for every legitimate organization, there seem to be two illegitimate ones.

Pinpointing a fraudulent charity can be difficult at times and it is certainly not an exact science, but knowing what to look for and how to handle your donations in the future, should ensure that the money you are donating goes to the people that need your help. The next time you are courted to make a donation, follow the tips below to avoid donating to scammers.

1. Never Make a Donation Over the Phone (Unless You Initiated the Call) – Legitimate charities do have a habit of cold calling for donations so many of the calls you receive could be real, however there is no way of knowing with a simple phone call if the person on the other line is who they say they are. If you are interested in their cause, ask them for the website information and offer to mail in a donation. Giving your credit card information over the phone is never a smart idea.
2. Never Make a Donation In Cash – The easiest way to lose your donation to fraud is to give them something that cannot be traced. If the organization has a booth set up, feel free to write a personal check from your online checking account. If you’re mailing in your donation, provide a money order or check written in the name of the charity. Being asked to make the donation payable to “Reggie” is an automatic no-no. For tax purposes, keeping a paper record of your donation is important. If you’re unlucky enough to donate to a scam, the IRS may audit your tax return, which is definitely something you want to avoid.
3. Never Make a Donation Through Email – Charities are fearful of being labeled as spam, so sending out mass-emails looking for donations doesn’t happen. If you ever see an email from someone stating to be a charity looking for a donation, there is an extreme amount of high-risk involved. Email is extremely un-secure and the link you click on to make your donation can take you absolutely anywhere.
4. Gather As Much Information As You Can – Before making a final decision, make sure you have gathered all of the available information there is on your charity of choice. Finding information can be easy, and doing any of the following should put your mind at ease:

Ask to see the organizations tax-exempt letter from the IRS. If they do not have one, or are unwilling to provide it, think twice about why.

Visit the charities website and look for things such as good grammar, a permanent street address, success stories, an outline of what the charities goals are, financial statements that tell you where the money goes and a board of directors. If you see that they are lacking many of the things above, it’s another sign that they might not be who they say they are.

Visit the IRS’s website and look them up. The IRS lists over 1.5 million charitable organizations that they recognize and if your charity isn’t on the list, time to move on.

If you think that you’ve been taken, you should immediately call the Federal Trade Commission (FTC) and file a complaint. 1-877-FTC-HELP begin_of_the_skype_highlighting              1-877-FTC-HELP      end_of_the_skype_highlighting (382-4357). Hopefully though, after reading the steps above to protect yourself, you never have a need for this phone number.

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Listen to this, you who rob the poor and trample down the needy!  You can’t wait for the Sabbath day to be over and the religious festivals to end so you can get back to cheating the helpless.  You measure out grain with dishonest measures and cheat the buyer with dishonest scales. And you mix the grain you sell with chaff swept from the floor.  Then you enslave poor people for one piece of silver or a pair of sandals. Now the Lord has sworn this oath by his own name, the Pride of Israel^: “I will never forget the wicked things you have done!”  Amos 8:4-7 (NLT)

Wow, this is a pretty harsh word from God today (Amos is not exactly the cheeriest book in the Bible) – He will never forget the “wicked things” being done.  Of course, it is quite obvious that this is not the proper way to act – robbing the poor, trampling down the needy, cheating the buyer, enslaving the poor – yeah, not a great way to get on God’s good side.

What really struck me about this passage, however, is what is found in the beginning of verse 5.  The people couldn’t wait for the Sabbath to end or the religious festivals to conclude so they could get back to lying, cheating, and stealing.  That means that they were observing the Sabbath and the religious festivals!  They cared so little about their fellow man, yet they observed God’s commandments regarding the Sabbath and the festivals.  Certainly God saw right through this charade to their true character and, as it says, He would “never forget” their wickedness.

I think this is a cautionary tale relevant for our lives today as well.  This is yet another example from the Bible where the desire for monetary gain leads to sin.  Does that desire for money drive us to do things we know we should not?  Are we compartmentalizing our lives to such an extent that we could be guilty of attending church on Sunday morning and Wednesday evening but spending the remainder of the week cheating those around us for financial gain?  If so, God is not impressed by our feeble attempts to placate him by doing the whole church thing.  Remember, God doesn’t want us to “do church” He wants to us to “be the church.”  God’s church is not a building – it’s His people.

God bless and have a great week being the church…

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